Oregon liquor sales, profits outpace rest of economy

Katie Currid/The OregonianOwner and bartender Michael Shea mixes up his signature daiquiri at the Rum Club on Southeast Sandy Blvd. The OLCC has reported that liquor sales are up in Oregon.

Despite a slow economy, Oregonians are drinking enough to boost state liquor profits by a tasty 9 percent, the Oregon Liquor Control Commission announced Thursday.

"We have been steadily going up," said OLCC spokeswoman Christie Scott. During the height of the recession, buyers went for the cheaper products, she said. "What we're seeing is, people are starting to buy more expensive products again."

The agency released figures that showed total revenue of $487.4 million from July 2011 through June 2012, the state fiscal year. After expenses, the agency had $194 million to distribute to state, county and city programs, an increase of $16 million over the previous year.

That compares with total revenue of $459.4 million the previous year, which netted the agency $178.4 million. Nearly all the revenue comes from liquor sales, with a small amount from taxes on beer and wine and license fees.

Various factors contributed to the increase, Scott said, including population increases and the slowly improving economy. Washington's privatization of liquor sales, which led to high prices in some cases and sent buyers flocking across the border to Oregon liquor stores in June, wasn't much of a factor because it only affected the final month of the fiscal year, Scott said.

"People keep on buying the stuff," said Adam Marquand, who was tending the cash register at Uptown Liquor in Northwest Portland on Thursday. "When people are happy, they're going to drink. When people are sad, they're going to drink."

Oregon, famous for its homegrown wines and handcrafted brews, has been experiencing a bit of a cocktail renaissance as well. Bars featuring fancy drinks and top-shelf brands have become more popular among younger urbanites, and more bars devoted to cocktails have opened in recent months.

"I would say there's a certain trend," said Michael Shea, owner of the Rum Club on Southeast Sandy Boulevard. "Whereas people in Portland have maybe been enjoying better food, people are starting to come around to enjoying better cocktails that are made with quality ingredients and pay a little more of a premium for that. That's essentially the business model we're based on."

Rum Club opened about a year ago. "Things are good," Shea said. The bar's signature daiquiris go for $8.

Liquor sales -- all of which go through state-controlled stores -- aren't taxed, but the state applies a markup that is essentially double what it pays for any given bottle or case of distilled spirits. The profits are doled out to various government agencies.

This year's breakdown: $110 million to the state general fund, which pays for everything from schools to prisons; $34 million to cities around Oregon; $17 million to counties; and $8 million to mental health, alcoholism and drug programs.